Budget calls for hike in state money

ANNAPOLIS -

When Gov. Robert Ehrlich released his new budget proposal last week, it included, once again, a sizable jump in the amount of taxpayer dollars that would be coming back to Washington County.

The county's share of nearly $150 million would be $20.6 million more than the current fiscal year, for a 16 percent increase - the highest percentage increase of any jurisdiction in the state. The fiscal year begins July 1.

But the new money is not so much the result of the governor's generosity as it is a function of calculations used by the state to fairly divide its treasury among the counties.

And those calculations, or funding formulas, largely are based on population and wealth, said John Rohrer, coordinator of fiscal and policy analysis for the Maryland Department of Legislative Services, and policy analyst Hiram L. Burch.

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The biggest chunk - more than 77 percent - of state aid to local governments in the proposed budget goes to education.

"School boards, certainly since the 1990s, have received the lion's share of dollars in state aid," Rohrer said.

One of the main factors in determining how much money goes to a particular county's school system is enrollment, and the numbers in Washington County have surged by 5.9 percent since fiscal year 2002 - one of 12 counties to post gains. Statewide, schools lost enrollment by half a percentage point, or 4,547 students, during the same time period.

The enrollment growth for Washington County is the second highest in the state this year.

Another factor is the county's wealth, including personal income and the assessable tax base, which rose by 19.4 percent. Statewide, wealth grew by 21.4 percent; 16 jurisdictions posted higher gains than Washington County.

These two factors worked in the county's funding favor, Rohrer said.

"Less wealthy counties receive higher amounts of aid," he said. With school enrollment higher than other counties and its growth of wealth lower, the county's rate of "wealth per pupil" is calculated at $242,733 - well below the state average of $316,063. That makes the school system eligible for more state aid.

Washington County Public Schools are more reliant on the state than other jurisdictions, Rohrer said. Only eight others get a higher proportion of state funds. Of Washington County's $150 million slice of the state budget, $111.8 million is for education.

And while this year's allocation for education is nearly $16 million more than last year's $95.8 million, it doesn't necessarily follow that the school system needs fewer local dollars, Rohrer and Burch said. The school system might be getting more money, but it also is dividing it between more students - 1,148 more than four years ago.

In fact, the county actually loses state money if it cuts aid to education. The "guaranteed tax base" calculation is based on the local government's contribution to its school system.

"The more effort a county makes, it raises the state match," Rohrer said.

On the roads

The other large portion of state aid to the county is for transportation, and nearly all of that comes from highway user fees - generated by taxes on gasoline and other fees. The amount that comes back to the counties is based on road mileage and the number of vehicles registered in them, Rohrer said.

County officials have said the state hasn't always returned as much of the transportation funding as it should, and Rohrer said that's true.

"One of the things the state was confronted with in the last few years was fiscal budget problems," he said. With a commitment to add money for education when the General Assembly adopted the recommendations of the Thornton Commission for school spending, "it required a lot of actions. One was to pull back in other aid to local government," Rohrer said.

For the current fiscal year, $25.8 million was shifted from the Transportation Trust Fund. Ehrlich has elected to leave it for now, Rohrer said, but added that this is a short-term issue.

The allocation for transportation to Washington County is $13.1 million in the budget proposal, a 9 percent increase from the current year's total of $12 million.

Transportation wasn't the only budget area to be cut back. Program Open Space, which provides money for parks and conservation areas, gets money from the transfer tax on property. But it wasn't fully funded this year, as other programs took priority.

But it fares significantly better in the fiscal 2007 proposal. Rohrer said that because of the heat in the real estate market, revenue from the transfer tax "is going through the roof."

As a result, Washington County's Open Space share has more than doubled, from $954,771 in the current budget to $2.8 million in fiscal 2007. Statewide, Program Open Space aid to counties totals $135.6 million in the new budget proposal - $89 million more than the current year.

One allocation that hasn't changed much for Washington County is aid for public safety, which at $1.6 million is only $8,184 more than the current budget. This aid is based on population density, Burch said.

"The amounts are pretty stable," he said. "There's not much of an increase from year to year."